An unexpected plunge in new home sales for the month of May to the lowest level in nearly 45 years have renewed fears of another decline in housing prices.
New home sales collapsed last month, declining 32.7% to a seasonally adjusted rate of 300,000, down from an downwardly revised 446,000 in April, printing the slowest sales pace on records dating back to 1963, the Commerce Department reported Wednesday. The prior monthly record low was in Sept. 1981, when new homes were selling at a 338,000 rate.
The bleak report is the first sign of how the end of federal tax credits, which expired April 30, could affect the nation’s housing market. The report also said that the median sales price of new houses sold in May 2010 was $200,900; the average sales price was $263,400 while the seasonally adjusted estimate of new houses for sale was 213,000, representing a supply of 8.5 months at the current sales rate.
Check out the full official release below: